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Thursday, 26 June 2003
Page: 17803


Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) (2:14 AM) —I move:

That the amendments be agreed to.

The main purpose of the Wheat Marketing Amendment Bill 2002 is to provide a means to appropriate to the Wheat Export Authority moneys collected as a wheat export charge. The introduction by regulations of an export charge on wheat and fees for applications for consents to the WEA will provide a secure funding mechanism to enable the WEA to continue its functions as an integral part of the wheat single desk arrangements. The bill generated much debate during the inquiry by the Senate Rural and Regional Affairs and Transport Legislation Committee.

This debate has been about issues considerably broader than the funding mechanism for the WEA, including the operation of the single desk, the relationship between AWB Ltd and AWB International Ltd, and the WEA's ability to effectively monitor AWBI's export performance and to report to growers. The majority Senate committee report recommended that funding for the WEA be provided for only one year, that the monitoring and review powers of the WEA be strengthened, that alternative arrangements for conducting the 2004 review be considered and that wheat exports in bags and containers be further deregulated.

The government has clearly indicated that it has no intention of adopting changes to the bill which would weaken the wheat single desk or the benefits it provides. The bill is not intended to fundamentally change the arrangements agreed between industry and government, and implemented from 1999, despite this being what some parties may have sought. It is aimed at providing adequate funding to the ongoing operations of the WEA. Nonetheless, the government has agreed to address issues which will strengthen the arrangements and ensure greater transparency so that growers can better evaluate the benefits they receive from the single desk.

I note that the Senate committee reports that there has not been an incident in which AWBI has denied the WEA access to necessary information. Nonetheless, the government has agreed to accept amendments to strengthen the powers of the WEA so it can compel AWBI, and through it AWB Ltd and other companies in the group, to provide it with the information it reasonably needs to perform its functions. It is important that these powers apply to all companies, because of the service relationship which exists between the single desk subsidiary, AWBI, and its parent, AWB Ltd.

Provision will also be made to protect commercially sensitive information so that neither the AWB group nor the pools will be disadvantaged in the marketplace. These changes will go a long way to increasing industry confidence over the WEA's capacity to effectively do its job. In particular, it will increase confidence in the 2004 review. I am also aware of general industry support for the WEA to have the powers expressed in the legislation.

Further, the government has recognised the importance to industry of legislative provisions to enforce the current practice whereby the WEA reports to growers as well as to the government on the monitoring of AWBI's export performance. Of course the WEA will not publish information which may commercially disadvantage AWBI or which could impact negatively on pool returns. The government has already made it quite clear that the 2004 review is about the performance of AWBI as the commercial manager of the wheat single desk. The review is not about the existence of the single desk, nor is it intended to incorporate national competition principles.

The government accepts that the review by an independent committee, appointed by me as minister on a skills basis with appropriate consultation, would improve the transparency of the review and provide greater confidence to growers and other stakeholders. The review will cover the following broad areas: firstly, wheat export arrangements, which include niche marketing, AWBI export rights and its role in export consents; secondly, pooling operations, which include market analysis, pool management and any other matters relating to the pools; thirdly, pricing performance, which includes gross sales revenue and commodity hedging; fourthly, supply chain, which includes transport and storage costs; fifthly, the operating environment, which is concerned with corporate governance, the service level agreement and delivery issues; and, finally, the performance of the authority in undertaking its functions.

The WEA has a considerable body of material and information on the operation of the export monopoly and therefore the WEA will be required to cooperate with the review committee to ensure it has access to all the relevant information it needs to complete its task. It would be impossible to contemplate reviewing AWBI's operation without drawing on this wealth of material. The relationship between AWB Ltd and AWBI is already examined in the annual monitoring process by the WEA, with a performance report to AWBI later this year, and it will be an essential part of the 2004 review. Similarly, supply chain issues are part of the current monitoring process and the review will also report on the benefits to growers from management of the single desk.

Including a sunset provision in the export charge regulations is not something the government embraces, given the uncertainty it generates. However, it will be necessary to include a sunset provision to facilitate the passage of the regulations through the Senate. We have agreed that the sunset date will be 30 June 2006. The charge rate will be reassessed on a regular basis in consultation with industry and, where necessary, it will be changed through regulations, which of course are disallowable instruments.

In addition to its main purpose, the bill contains a provision to clarify the objectives of the WEA's export control functions. This reflects the government's expressed view in its response to the NCP review that the WEA should complement the role of the single desk arrangements in maximising net pool returns through AWBI while at the same time facilitating the development of niche and other markets, where this can benefit both growers and the wider community. (Extension of time granted)Incorporating the objective in the Wheat Marketing Act at this time will remove any ambiguity which may exist with regard to the government's policy on and commitment to the single desk. A recent judgment from the High Court clarified the actions of AWBI in the export consent process and in its management of the single desk to maximise net returns to growers delivering the pool.

The bill also amends the Wheat Marketing Act to improve the operational efficiency of the WEA, which would benefit exporters seeking consent and allow the WEA to better manage its compliance procedures. It is essential that the WEA has adequate financial resources to continue its role, and the passage of this bill, including the amendments, is a vital element to achieving this process. I commend the amendments to the House.


The SPEAKER —The question is that the amendments be agreed to.

Question agreed to.